Or as Lew Platt, former CEO of Hewlett-Packard said, "If only HP knew what HP knew, we’d be three times more productive."

"All companies have internal problems that cost them time and money, but most don’t know where they exist," says Eden. "In fact, the top of the house is usually unaware that problems exist at all, so employees live with frustrations."

Instead of ignoring them, companies need to take the time to identify and solve their issues. Eden and his coauthor, Terri Long, say the first step is to get rid of outdated ways of thinking.

Often a company sticks with the thing that helped it become successful, but just because it’s been doing something a certain way for a long time doesn’t mean it’s still the right thing to do.

For example, Eden and Long were working with a food manufacturer that made spaghetti sauce. While visiting the plant, they asked an employee, "What frustrates you most?" The employee said that the tomato sauce had big dices of tomato that clogged up the machine. He frequently had to turn it off and clean it out, lowering the yield and slowing down the line.

If the task isn’t going to help you make a decision, stop spending the time doing it

"I asked him what he would do to fix it and he said he’d make a smoother sauce, adding that marketing would never accept it because customers love big dices of tomato," says Eden. "For most companies that would be the end of story, but we repeated the story to their marketing department and challenged them with the question, ‘How do you know customers love big dices of tomato?’"

No one had a definitive answer, and after extensive testing, the company found out that customers actually preferred a smoother sauce. The company changed its recipe and saved $800,000 a year in lost time at their factory. "All because someone asked, ‘How do you know?’" says Eden.

American companies don’t like to use the word "problem," says Eden; it has a negative connotation. Instead, they call problems "opportunities." Unfortunately, not using the word ‘problem’ can cause an even bigger problem.

"Using the word ‘opportunity’ suggests that the item could be deferred, delayed, or ignored," says Eden. "The word ‘problem’ says it’s urgent. What would have happened if Apollo 13 had said, ‘Houston, we have an opportunity."

Eden says language matters and it changes behavior. Managers need to tell employees that they want to hear about problems and they want them to be labeled as problems.

After World War II, Eden says many companies were run like military operations, using top-down command. Contemporary management style, however, has skewed to be more inclusive, with decisions made collectively by a team.

"Some leaders go overboard and become afraid to act unless they have everyone on board," says Eden. "That seeds veto power to anyone on team."

A good leader doesn’t ask for everyone’s permission, says Long. "A good leader asks what are the facts, knows what’s important for the company, and makes the decision—whether or not everyone is on board from the beginning," she says. "Most employees will get on board once the decision is made."

While executives should make decisions without the entire team being on board, they also have to give their employees the right to dissent.

Everybody should know that they don’t just sit quietly when bad decisions are being made.

"Sometimes an executive shows exuberance for an idea, and the team start unconsciously hyping the good and hiding the bad," says Eden. "Six months later when the decision was found to be terrible, a team member might say, ‘I always knew it was a bad idea.’ Employees needed to feel an obligation to dissent."

"In some institutions, such as on an aircraft carrier or in an operating room, even the most junior person is expected to speak up," says Long. "Everybody should know that they don’t just sit quietly when bad decisions are being made. And there should be consequences for those who say, ‘I told you so.’"

From the time most of us were children, our parents and teachers have encouraged us to do your best, but sometimes this isn’t practical, says Eden.

"Americans have a tendency to want to excel, and that sounds like a good thing," says Eden. "But if you use this mindset in everything you do, you’re spending a huge amount of time on things that aren’t important."

Instead, identify the things that are worth "gold plating," and then adopt a policy where good is good enough.

"If the task isn’t going to help you make a decision, stop spending the time doing it," says Eden. "Use your scarce resource of time in a smart, sustainable way."

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4Comments

1 and #2 go hand in hand. The hardest thing sometimes for a sales team is to explain to management "lost opportunities". You can quantify the sales you make, but finding out what you are missing out on, and why is another matter altogether and much more difficult.

Regarding #5 it is true that sometimes you must compromise on what is necessary NOW, without delaying your product/project. However, you must never lose sight of the issue, and should still make progress toward the BEST solution. Often businesses go for the convenient and immediate solution, and then lose sight of the big picture and they hurry off to fix the next problem. This "quick to market" and "good enough for now" mentality has lead to the "disposable" attitude that wastes resources, pollutes the environment, and in the long run is not sustainable... Sometime you have to stop and take the time to "DO IT RIGHT" even if you sacrifice in the short term.

David, we absolutely agree that many things deserve to be done with a company's best effort, particularly when it creates value for the customer and the company. But often it is just a waste of resources, for example, when the boss asks for that 15th revision of the internal PowerPoint presentation when the second revision was sufficient to communicate the points.

Interesting perspective. Point No. 2 does become problematic, however.

Without having a Kaizen-like or Theory of Constraints approach, where specific issues are discussed, rated and mapped, solutions most likely won't take place. That analysis does not even need to be overly formal, though consultants will love to jam their processes down your throat! The outcomes are usually doable, and can be evaluated on the return on investment-either in revenue growth or cost avoidance.

Utilizing a word like 'problem' creates a whole new set of issues. I consulted for a client who was seeking an approach to quantify the urgency of sales orders going through the house. Their solution: Rush order, Hot rush order, Really rush order, Hot hot order.....etc. So is a problem a big problem, a really big problem, an insurmountable problem...?

Scott, agreed that it is important to have a disciplined process to solve specific problems and as you said, the analysis does not need to be overly formal. We believe that the employees closest to the work and to the customer are better than outside consultants at coming up with good solutions as long as they are given the right tools.